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EXHIBIT 10.13
AGREEMENT FOR SALE OF STOCK
Among
PIEDMONT MINING COMPANY, INC., Seller
KERSHAW GOLD COMPANY, INC., Company
and
LANCASTER MINING COMPANY, INC., Buyer
Dated as of
DECEMBER 22, 1998
THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT
TO S.C.CODE ▇▇▇. SECTION 15-48-10 ET SEQ. (1993 SUPP.)
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AGREEMENT FOR SALE OF STOCK
THIS AGREEMENT FOR SALE OF STOCK ("Agreement") dated as of December 22,
1998, entered into by and among Lancaster Mining Company, Inc., a Delaware
corporation ("Buyer"), Kershaw Gold Company, Inc., a South Carolina corporation
(the "Company"); and Piedmont Mining Company, Inc., a North Carolina corporation
(the "Seller"). Buyer, the Company, and the Seller are referred to collectively
herein as the "Parties."
This Agreement contemplates a transaction in which the Seller will sell
all of the outstanding capital stock of the Company to the Buyer.
In consideration of the premises and the mutual promises herein made,
and in consideration of the representations, warranties and covenants herein
contained, the Parties agree as follows.
SECTION 1
DEFINITIONS
1.1 Definitions. Certain capitalized terms used in this Agreement shall
have meanings set forth in Section 9.1.
1.2 Accounting Terms. Accounting terms used herein and not otherwise
defined herein shall have the meanings attributed to them under generally
accepted accounting principles except as otherwise specified.
SECTION 2
THE SALE
2.1 Sale of Stock. On the Closing Date, Seller shall sell, transfer and
deliver to Buyer ten thousand (10,000) shares of the Company's Common Stock,
which represents all of the issued and outstanding capital stock of the Company
(the "Sale").
2.2 The Closing. The closing of the Sale contemplated by this Agreement
(the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇, LLP, Greenville, South Carolina, commencing at 9:00 a.m. local time on
the second business day following the satisfaction or waiver of all conditions
to the obligations of the Parties to
THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT
TO S.C.CODE ▇▇▇. SECTION 15-48-10 ET SEQ. (1993 SUPP.)
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consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
such other date as the Parties may mutually determine (the "Closing Date");
provided, however, that the closing date shall be no later than March 15, 1999.
2.3 The Sale Consideration.
2.3.1 Consideration. The aggregate consideration to be paid for
all of the issued and outstanding Common Stock of the Company on a
fully-diluted basis pursuant to the Sale is Two Million Dollars
($2,000,000) (the "Consideration).
2.3.2 Payment of the Closing Consideration. At Closing, the Buyer
and the Company will cause to be paid the Consideration, in cash by wire
transfer in immediately available funds to an account designated by
Seller.
SECTION 3.
REPRESENTATIONS AND WARRANTIES CONCERNING
THE COMPANY
In order to induce the Buyer to enter into this Agreement and to provide
the Consideration set forth in Section 2, the Seller represents and warrants to
the Buyer as follows:
3.1 Organization, Qualification, and Corporate Power. Except as set
forth on Schedule 3.1, the Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of South Carolina.
The Company is duly authorized to conduct business and is in good standing under
the laws of each jurisdiction where such qualification is required except where
the failure to be so qualified would not have a Material Adverse Effect on the
business, financial condition or results of operations of the Company taken as a
whole. The Company has full corporate power and authority necessary to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it. Schedule 3.1 lists the current directors and officers of the
Company. The Company has delivered to the Buyer correct and complete copies of
the charter and bylaws of each of the Company (as amended to date). The minute
books (containing the records of meetings of the stockholders, the board of
directors, and any committees of the board of directors), the stock certificate
books, and the stock record books of the Company are correct and complete. The
Company is not in default under or in violation of any provisions of its charter
or bylaws.
3.2 Capitalization. The entire authorized capital stock of the Company
consists of one hundred thousand (100,000) shares of common stock without par
value ("Common Stock"), of which 10,000 shares are issued and outstanding (the
"Shares"). All of the issued and outstanding Shares have been duly authorized,
are validly issued, fully paid, and non-assessable, and are held of record by
the Seller. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or
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commitments that could require the Company to issue, sell, or otherwise cause to
become outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Company. There are no voting trusts, proxies, or
other agreements or understandings with respect to the voting of the capital
stock of the Company.
3.3 Authorization of Transaction. Subject only to approval of the
shareholders of the Seller, the Seller and the Company have full corporate power
and authority to execute and deliver this Agreement and to perform their
respective obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of the Seller and the Company, enforceable in
accordance with its terms.
3.4 Non-Contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency, or court to which the Company is subject or any provision
of the charter or bylaws of the Company, or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Company is a party or by which it is bound or to which
any of its assets is subject (or result in the imposition of any Lien upon any
of its assets). The Company does not need to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.
3.5 Brokers' Fees. Neither the Company nor the Seller has any Liability
or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.
3.6 Subsidiaries. The Company does not have any subsidiaries.
3.7 Taxes. All Tax Returns required by any Governmental Authority to be
filed by the Company and the Seller in connection with the properties, business,
income, expenses, net worth and corporate status of the Company and the Seller
have been timely filed, and such returns are accurate and complete in all
respects. All Taxes due pursuant to the Tax Returns or otherwise due in
connection with the properties, business, income, expenses, net worth and
corporate status of the Company and the Seller have been paid, other than Taxes
which are not yet due or which, if due, are not delinquent, are being disputed
in good faith, or have not been finally determined, and adequate and complete
reserves for all such Taxes have been established. There are no Tax claims,
audits or proceedings pending in connection with the properties, business,
income, expenses, net worth or corporate status of the Company or Seller, and
there are no threatened claims, audits or proceedings. The Company and the
Seller have withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, Shareholder, or other third party. There are not currently
in force any extensions of time with respect to the dates on which any Tax
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Return was or is due to be filed by the Seller or Company or any waivers or
agreements for the extension of time for the assessment or payment of any Tax.
The Company (i) has not with regard to any property or assets held or
acquired by it at any time, filed a consent pursuant to Section 341(f) of the
Code, (ii) is not a party to any agreement providing for the allocation, sharing
or indemnification of Taxes, (iii) is not required to include in income any
adjustment pursuant to Section 481(a) of the Code, or (iv) is not a party to any
agreement, plan or arrangement (including, without limitation, any Employee
Benefit Plan or Other Plan) or any amendment thereto which would obligate it to
make a payment which would not be deductible by reason of Section 280G of the
Code.
3.8 Powers of Attorney. There are no persons authorized by proxies,
powers of attorney or other like instruments to act on behalf of the Company in
matters concerning any of its business or affairs. All such proxies, powers of
attorney or other like instruments are revocable with or without cause at the
discretion of the Company.
3.9 Employment. The Company has withheld or collected from each payment
made to each of its employees the amount of all Taxes required to be withheld or
collected therefrom, and the Company has paid the same when due to the proper
Governmental Authorities. Except as set forth on Schedule 3.9, there are no
controversies, grievances or claims by any of the employees, former employees or
beneficiaries of employees of the Company pending with respect to their
employment or benefits incident thereto, including, but not limited to, sexual
harassment and discrimination claims and claims arising under workers'
compensation laws ("Employee Claims")" and no Employee Claims are threatened
against the Company. There is no union representation of the Company's
employees. The Company has no employees.
3.10 Employee Benefits.
The Company does not contribute nor has ever been required
to contribute to any pension, profit sharing or 401(k) plan. The
Company has no liability with respect to any employee benefit
plan.
3.11 Assets and Liabilities.
(a) The Company has no material assets other than (i) its
interests in the ▇▇▇▇▇ Property and the ▇▇▇▇▇ Mining Venture, (ii) its
rights under the ▇▇▇▇▇ Mining Venture Contracts, (iii) its claims and
causes of action in the ▇▇▇▇▇ Mining Venture Litigation, and (iv) the
other assets described in Schedule 3.11(a) attached hereto.
(b) The Company has no material Liabilities either directly, by
guaranty or otherwise, other than (i) any Liabilities to the Amax
Companies under the ▇▇▇▇▇ Mining Venture Contracts, (ii) any Liabilities
to third parties that were incurred by, or pursuant to, the ▇▇▇▇▇ Mining
Venture or that are attributable to the Company by reason of its
participation in the ▇▇▇▇▇ Mining Venture or its interests in the ▇▇▇▇▇
Property (including without limitation, property taxes on the ▇▇▇▇▇
Property or other assets of the ▇▇▇▇▇
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Mining Venture and obligations under leases included in the ▇▇▇▇▇
Property), (iii) any Liabilities to the Amax Companies arising out of
the ▇▇▇▇▇ Mining Venture Litigation, (iv) any Environmental Liabilities
with respect to the ▇▇▇▇▇ Property, and (v) the other Liabilities
described in Schedule 3.11(b) hereto.
3.12 Operations. Since January 1, 1993, (a) the Company has conducted no
business or operations other than the business and operations conducted through
the ▇▇▇▇▇ Mining Venture, (b) the Company has engaged in no material acts or
activities other than its participation in the ▇▇▇▇▇ Mining Venture, its
disposition of assets held by it prior to that date or proceeds thereof that
were not included in the ▇▇▇▇▇ Mining Venture, and its prosecution and defense
of the ▇▇▇▇▇ Mining Venture Litigation, and (c) the Company has had no
employees. With respect to any assets disposed of by the Company that were not
included in the ▇▇▇▇▇ Mining Venture, no claim has been asserted, and the Seller
and the Company are unaware of any facts which could give rise to a claim being
made in the future, that the Company has or may have an Environmental Liability
as a result of its interest in, or operation of, such assets.
3.13 Litigation. The Company is not party to any action, suit,
arbitration or other proceeding before any court or quasi-judicial or
administrative agency of any jurisdiction or before any arbitrator, other than
(a) the ▇▇▇▇▇ Mining Venture Litigation and (b) any proceedings to which the
Company is party solely by reason of its being a participant in the ▇▇▇▇▇ Mining
Venture and which proceedings are being conducted under the control of one or
more of the Amax Companies. The Company is not subject to any outstanding
injunction, judgment, order, decree, ruling or charge other than any arising out
of the other ▇▇▇▇▇ Mining Venture Litigation or any in connection with the ▇▇▇▇▇
Mining Venture in its capacity as a participant therein or as the owner of its
interest in the ▇▇▇▇▇ Property and which applies to one or more of the Amax
Companies in its capacity as such.
3.14 Contracts. Other than the ▇▇▇▇▇ Mining Venture Contracts and any
other obligation arising out of the ▇▇▇▇▇ Mining Venture, the Company is not a
party to any contract which would (a) require payment to a Person in excess of
Ten Thousand Dollars ($10,000) or (b) limit its freedom to compete in any line
of business, with any Person or in any geographic area or market.
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
4.1 Organization. The Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation. The Buyer is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification is
required except where the failure to be so qualified would not have a
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Material Adverse Effect on the business, financial condition or results of
operations of the Buyer taken as a whole.
4.2 Authorization of Transaction. The Buyer has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of the Buyer, enforceable in accordance with its terms and conditions.
4.3 Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge. or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
the charter or bylaws of the Buyer or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel or require any notice
under any agreement, contract, lease, license, instrument or other arrangement
to which the Buyer is a party or by which it is bound or to which any of its
assets is subject. Except as set forth in Schedule 4.3, the Buyer does not need
to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement.
4.4 Brokers' Fees. The Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
SECTION 5
COVENANTS
The Parties agree as follows with respect to the period from and after
the execution of this Agreement.
5.1 Each of the Parties will use its reasonable best efforts to take all
action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Section 6 below).
5.2 Notices and Consents. The Company will give any notices to third
parties, and will use its reasonable best efforts to obtain any third-party
consents, that the Buyer reasonably may request.
5.3 Regulatory Matters and Approvals. Each of the Parties will give any
notices to, make any filings with, and use its reasonable best efforts to obtain
any authorizations, consents,
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and approvals of governments and governmental agencies which may be reasonably
requested by another Party.
5.4 Operation of Business. The Company will not engage in any practice,
take any action, or enter into any transaction outside the ordinary course of
business. Without limiting the generality of the foregoing:
(i) the Company will not authorize or effect any change
in its charter or bylaws;
(ii) the Company will not grant any options, warrants,
or other rights to purchase or obtain any of its capital stock
or issue, sell or otherwise dispose of any of its capital stock;
(iii) except as provided herein, the Company will not
declare, set aside, or pay any dividend or distribution with
respect to its capital stock (whether in cash or in kind), or
redeem, repurchase, or otherwise acquire any of its capital
stock;
(iv) the Company will not issue any note, bond, or other
debt security or create, incur, assume, or guarantee any
indebtedness for borrowed money or capitalized lease obligation;
(v) the Company will not impose any Liens upon any of
its assets;
(vi) the Company will not make any capital investment
in, make any loan to, or acquire the securities or assets of any
other Person;
(vii) the Company will not make any change in employment
terms for any of its directors, officers, and employees; and
(ix) the Company not will commit to any of the
foregoing.
5.5 Full Access. The Company will permit representatives of the Buyer to
have full access to all premises, properties, personnel, books, records
(including tax records), contracts, and documents of or pertaining to the
Company.
5.6 Notice of Developments. Each Party will give prompt written notice
to the others of any material adverse development causing a breach of any of its
own representations and warranties in Section 3 and Section 4 above. No
disclosure by any Party pursuant to this Section 5.6, however, shall be deemed
to prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
5.7 Exclusivity. The Seller will not solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of all or substantially all of the
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capital stock or assets of the Company (including any acquisition structured as
a merger, consolidation, or share exchange). The Seller and the Company shall
notify the Buyer immediately if any Person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.
5.8 Post-Closing Tax Covenant. The parties hereto acknowledge and agree
that the Seller and the Company will make a timely election under Treasury
Regulation Section 1.1502-20(g) to reattribute all net operating losses and net
capital losses sustained by the Company for all of its taxable years or periods
ending on or prior to December 31, 1998, to the Seller to the maximum extent
permitted under such Treasury Regulation. To accomplish this reattribution, the
Buyer agrees that it will (a) cause the Company to sign the statement required
by Treasury Regulation Section 1.1502-20(g)(5)(i) (the "Statement") in
substantially the form attached hereto as Schedule 5.8 with the appropriate
reattributed losses as determined by the Seller inserted into the Statement, (b)
cause the Company to retain a copy of the Statement in its records, (c)
acknowledge to the Seller in writing its receipt of a copy of the Statement when
delivered to it, and (d) attach the Statement, or cause the Statement to be
attached, to the Company's timely filed federal income tax return, or to the
timely filed federal income tax return of the consolidated group that includes
the Company, for the first tax year ending after the due date, including
extensions, of the Seller's tax return for the tax year of the Seller's sale of
the Shares to the Buyer in which the Statement is to be filed, as required by
Treasury Regulation Section 1.1502-20(g)(5)(ii).
Seller acknowledges that this election is being made at its request and
for its benefit. Neither the Buyer nor the Company makes its representation or
warranty regarding the appropriateness of the election, and neither the Buyer or
the Company shall have any liability to the Seller in the event that the net
operating losses and net capital losses sustained by the Company are not
reattributed. Seller agrees to keep the Company advised of any position taken by
the Internal Revenue Service with respect to this election.
5.9 Litigation Standstill. Until the Closing or the termination of this
Agreement pursuant to Section 7, the parties hereto will, and will cause their
respective affiliates to, refrain from prosecuting the ▇▇▇▇▇ Mining Venture
Litigation except as necessary to maintain the pendency thereof until the
Closing, and refrain from enforcing any arbitration award or judgment entered in
connection therewith.
SECTION 6
CONDITIONS TO OBLIGATION TO CLOSE
6.1 Conditions to Obligation of the Buyer. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
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6.1.1 The Seller shall have entered this Agreement and delivered
to the Buyer stock certificates representing the outstanding shares,
with appropriate stock transfer power for purchase.;
6.1.2 The Parties shall have procured all required third-party
consents;
6.1.3 The representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of
the Closing Date and Seller shall have delivered a certificate executed
by all of its directors that to their knowledge, such representations
and warranties are true and correct;
6.1.4 The Company shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
6.1.5 The Buyer shall have received from counsel to the Company
and the Seller an opinion(s) in substantially the form attached hereto
as Schedule 6.1.5, addressed to the Buyer, and dated as of the Closing
Date and such other evidence as may be reasonably required by Buyer to
evidence that the Seller has taken all actions necessary to effect the
transaction;
6.1.6 The Buyer shall have received the resignations, effective
as of the Closing, of each director and officer of the Company;
6.1.7 All actions to be taken by the Company in connection with
the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer;
6.1.8 Execution and delivery of an Agreement of Settlement and
Release, in substantially the form attached hereto as Exhibit I, ending
all of the ▇▇▇▇▇ Mining Venture Litigation and terminating all of the
obligations of the Seller under the ▇▇▇▇▇ Mining Venture Contracts.
The Buyer may waive any condition specified in this Section 6.1
if it executes a writing so stating at or prior to the Closing.
6.2 Conditions to Obligation of Seller. The obligation of the Seller to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
6.2.1 The Buyer shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
6.2.2 Approval of the transaction by the Seller's shareholders;
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6.2.3 No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Buyer to own the
capital stock of the Company and to control the Company;
6.2.4 The Seller shall have received all authorizations,
consents, and approvals of third parties;
6.2.5 The Seller shall have received from counsel to the Buyer
an opinion in substantially the form attached hereto as Schedule 6.2.5,
addressed to the Seller, and dated as of the Closing Date;
6.2.6 All actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller;
6.2.7 Receipt of certified copy of Board Resolutions of Buyer;
6.2.8 Execution and delivery of an Agreement of Settlement and
Release, in substantially the form attached hereto as Exhibit I, ending
all of the ▇▇▇▇▇ Mining Venture Litigation and terminating all
obligations of the Seller under the ▇▇▇▇▇ Mining Venture contracts.
SECTION 7
TERMINATION
7.1 Termination of Agreement. The Buyer on the one hand, or the Seller
on the other, may terminate this Agreement as provided below:
(i) by mutual written consent at any time prior to the
Closing Date;
(ii) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing
(A) in the event the Company or the Seller have breached in any
material respect any representation, warranty, or covenant
contained in this Agreement, the Buyer has notified the Company
and the Seller of the breach, and the breach has continued
without cure for a period of fifteen (15) days after the notice
of breach, or (B) if the Closing shall not have occurred on or
before March 15, 1999, by reason of the failure of any condition
precedent under Section 6.1 hereof (unless the failure results
primarily from the
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Buyer breaching any representation, warranty, or covenant
contained in this Agreement); or
(iii) the Company or the Seller may terminate this
Agreement by giving written notice to the Buyer at any time
prior to the Closing (A) in the event the Buyer has breached in
any material respect any representation, warranty, or covenant
contained in this Agreement, the Company or the Seller has
notified the Buyer of the breach, and the breach has continued
without cure for a period of fifteen (15) days after the notice
of breach, or (B) if the Closing shall not have occurred on or
before March 15, 1999, by reason of the failure of any condition
precedent under Section 6.2 hereof (unless the failure results
primarily from the Company or Seller breaching any
representation, warranty, or covenant contained in this
Agreement).
7.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 7.1 above, all rights and obligations hereunder
shall terminate without any liability (except for any liability of any
Party then in breach).
7.3 Extension of Time. In the event the parties are unable to
close the transaction by March 15, 1999, the Closing Date shall be
extended if mutually agreed to by them.
SECTION 8
INDEMNIFICATION
8.1 Survival of Representations and Warranties. The representations and
warranties of the Seller in Section 3 and of Buyer in Section 4 shall survive
the Closing and continue to be binding regardless of any investigation made at
any time by any party. Nevertheless, the right of the Buyer to bring claims for
breaches is subject to the time limits in paragraph (a) of Section 8.5, and the
right of the Seller to bring claims for breaches is subject to the time limits
in paragraph (a) of Section 8.6.
8.2 Indemnification by Seller. The Seller shall indemnify Buyer against
and hold them harmless from:
(a) any proceeding, claim, liability, loss, damage or
deficiency, and any and all costs and expenses (including, but
not limited to, reasonable legal and accounting fees) related to
any of the foregoing ("Loss"), resulting from or arising out of
any inaccuracy in or breach of any representation or warranty by
the Company or the Seller in Section 3 hereof;
(b) any Loss resulting from or arising out of any breach
or nonperformance by the Company prior to Closing or by the
Seller prior to Closing
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of any covenant or obligation herein or in any other agreement
or document delivered by or on behalf of the Company or the
Seller in connection herewith; and
(c) any Loss resulting from or arising out of the claims
of any broker, finder, or other Person acting in a similar
capacity on behalf of the Company pre-Closing or the Seller in
connection with the transactions herein contemplated.
For the purposes hereof, "Loss" shall not include any "Loss" which is otherwise
covered by insurance and the parties hereto expressly waive any subrogation
rights in connection therewith.
The Parties further agree that Buyer shall be entitled to proceed
directly against the Seller without joining, or proceeding through, the Company
in a claim for indemnification.
8.3 Indemnification by Buyer. The Buyer shall indemnify the Seller
against and hold them harmless from:
(a) any Loss resulting from or arising out of any
inaccuracy in or breach of any representation or warranty by
Buyer in Section 4 hereof or in any other agreement or document
delivered by or on behalf of Buyer in connection herewith;
(b) any Loss resulting from or arising out of any breach
or nonperformance by Buyer prior to or after the Closing or the
Company after the Closing of any covenant or obligation herein
or in any other agreement or document delivered by or on behalf
of Buyer in connection herewith; and
(c) any Loss resulting from or arising out of the claims
of any broker, finder or other Person acting in a similar
capacity on behalf of Buyer in connection with the transactions
herein contemplated.
8.4 Third-Party Claims. If any legal proceedings shall be instituted or
any claim is asserted by any third party in respect of which the Buyer on the
one hand, or the Seller on the other hand, may be entitled to indemnity
hereunder, the party asserting such right to indemnity shall give the party from
whom indemnity is sought written notice thereof. A delay in giving notice shall
only relieve the recipient of liability to the extent the recipient suffers
actual prejudice because of the delay. The party from whom indemnity is sought
shall have the right, at its option and expense, to participate in the defense
of such a proceeding or claim, but not to control the defense, negotiation or
settlement thereof, which control shall at all times rest with the party
asserting such right to indemnity, unless the proceeding or claim involves only
money damages and the party from whom indemnity is sought:
(a) irrevocably acknowledges in writing complete
responsibility for and agrees to indemnify the party asserting
such right to indemnity, and
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(b) furnishes satisfactory evidence of the financial
ability to indemnify the party asserting such right to
indemnity, in which case the party from whom indemnity is sought
may assume such control through counsel of its choice and at its
expense, but the party asserting such right to indemnity shall
continue to have the right to be represented, at its own
expense, by counsel of its choice in connection with the defense
of such a proceeding or claim. If the party from whom indemnity
is sought does assume control of the defense of such a
proceeding or claim, it will not, without the prior written
consent of the party asserting such right to indemnity, settle
the proceeding or claim or consent to entry of any judgment
relating thereto which does not include as an unconditional term
thereof the giving by the claimant to the party asserting such
right to indemnity a release from all Losses in respect of the
proceeding or claim. The parties hereto agree to cooperate fully
with each other in connection with the defense, negotiation or
settlement of any such proceeding or claim.
8.5 Limitations on Indemnification of Buyer. The indemnification of the
Buyer provided for under paragraph (a) of Section 8.2 shall be limited in
certain respects as follows:
(a) any claim for indemnification under paragraph (a) of
Section 8.2 by the Buyer shall be made by notice to the Seller
by the first anniversary of the Closing Date, except that: (i)
there shall be no limits on the time for making a claim for
indemnification relating to the representations and warranties
contained in Sections 3.2 [Capitalization], and (ii) a claim for
indemnification relating to the representations and warranties
contained in Sections 3.7 [Taxes] and 3.10 [Employee Benefits]
may be made until the expiration of the applicable statute of
limitations for either the assessment or collection of Taxes or
for the initiation of any action by a current or former Employee
Benefit Plan participant, (iii) claim for indemnification
relating to the representations and warranties contained in the
last sentence of Section 3.12 [Environmental liabilities as to
assets disposed of] may be made until the seventh
(7th)anniversary of the Closing Date; and
(b) Seller shall not be liable to the Buyer for
indemnification claims until the aggregate amount of
indemnification claims exceeds $50,000 at which time the Seller
shall be liable for the amount of such claims in excess of
$50,000, up to an aggregate indemnification amount equal to the
Consideration.
8.6 Limitations on Indemnification of Seller. The indemnification of the
Seller provided for under paragraph (a) of Section 8.3 shall be limited in
certain respects as follows:
(i) any claim for indemnification under paragraph (a) of
Section 8.3 by the Seller shall be made by the first (1st)
anniversary of the Closing Date except that there shall be no
limits on the time for making a claim for indemnification
relating to the representations and warranties contained in
Section 4.2 [Authorization of Transaction].
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8.7 Environmental Liabilities. At all times from and after the Closing,
the Buyer shall indemnify and save harmless the Seller and its Affiliates, and
their respective directors, officers, employees, agents and shareholders, from
and against any and all Environmental Liabilities with respect to the ▇▇▇▇▇
Property, including without limitation any such Environmental Liabilities
arising out of acts or omissions of the Seller or the Company or the condition
of the ▇▇▇▇▇ Property prior to the formation of the ▇▇▇▇▇ Mining Venture, and
from and against any Loss incurred by them with respect thereto. Section 8.4
shall apply to indemnification under this Section 8.7.
SECTION 9
MISCELLANEOUS
9.1 Definitions. When used in this Agreement, the following terms in all
of their tenses and cases shall have the meanings assigned to them below or
elsewhere in this Agreement as indicated below:
"Affiliate" of any Person means any person directly or
indirectly controlling, controlled by, or under common control
with, any such Person and any officer, director or controlling
person of such Person, and any relative by blood or marriage of
any such Person.
"Amax Companies" means Amax Gold Exploration, Inc., Amax
Gold Inc., Lancaster Mining Company, Inc., ▇▇▇▇▇ Mining Company,
Inc., and their respective successors and assigns.
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Common Stock" means the shares of the Company as
defined in Section 3.2
"Company" has the same meaning in the preface to this
Agreement.
"Consideration" is defined in Subsection 2.3.1.
"Contract" means any commitment, understanding,
instrument lease, pledge, mortgage, indenture, note, license,
agreement, purchase or sale order, contract, promise or similar
arrangement evidencing or creating any obligation, whether
written or oral.
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"Environmental Laws" shall mean any law, rule, policy,
order, permit, demand, or regulation whatsoever, or any federal,
state, or local government, or any subdivision thereof, relating
to damage to or the protection, preservation, reclamation, or
rehabilitation of, the environment, whether now existing or
hereafter arising, including without limitation, the South
Carolina Mining Act, the Lancaster County Land Use and
Development Standards Ordinance, and the Federal Clean Air Act,
Clean Water Act, Endangered Species Act, National Environmental
Policy Act, Comprehensive Environmental Response, Compensation
and Liability Act, Superfund Amendments and Reauthorization Act
of 1986, Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act, Toxic Substances Control Act,
Uranium Mill Tailings Radiation Control Act, and National
Historic Preservation Act, any state or local law counterparts
of the foregoing, and all amendments to the foregoing.
"Environmental Liabilities" shall mean liabilities,
whether imposed administratively or judicially, arising as a
result of any Environmental Law or arising under the common law
relating to damage to, or the protection, preservation,
reclamation, or rehabilitation of, the environment, including
any liabilities to third parties arising as a result of any
release of pollutants or other harmful substances into the
environment, or arising out of conditions constituting a
nuisance, such as blasting, dust, or noise.
"Financial Statements" has the meaning set forth in
Section 3.7.
"Governmental Authority" means any foreign, federal,
state, regional or local authority, agency, body, court or
instrumentality.
"▇▇▇▇▇ Mining Venture" means the mining venture
established under the ▇▇▇▇▇ Mining Venture Agreement.
"▇▇▇▇▇ Mining Venture Agreement" means the agreement so
captioned, dated as of July 1, 1992, between the Buyer and the
Company (then named "Mineral Mining Company, Inc.").
"▇▇▇▇▇ Mining Venture Contracts" means, collectively,
the ▇▇▇▇▇ Mining Venture Agreement, the Option and Earn-In
Agreement dated March 15, 1991, among Amax Gold Exploration,
Inc., the Seller, and the Company (then named "Mineral Mining
Company, Inc."), the Management Agreement dated as of July 1,
1992, among the Buyer, the Company (then named "Mineral Mining
Company, Inc."), and ▇▇▇▇▇ Mining Company, Inc., and any and all
other contracts, agreements, and instruments (including, without
limitation, any oral contracts or contracts or quasi-contracts
established by implication or course of dealing) between or
among any of the Seller and the Company, on the one hand, and
any of the Amax Companies, on the other hand, or from any of
Seller and the
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Company to any of the Amax Companies or from any of the Amax
Companies to any of the Seller and the Company, but not
including this Agreement or any contract, agreement or
instrument delivered pursuant to this Agreement.
"▇▇▇▇▇ Mining Venture Litigation" means all suits,
actions or proceedings (including arbitration proceedings)
between any of the Seller and the Company, on the one hand, and
any of the Amax Companies, on the other hand, including those
more particularly described in the form of Agreement of
Settlement and Release attached hereto as Exhibit I. For
purposes of Sections 3.11 through 3.13, "▇▇▇▇▇ Mining Company
Litigation" also includes the proceedings pursuant to the
petitions of the Seller and the Company for relief under the
U.S. Bankruptcy Code brought in the U.S. Bankruptcy Court for
the Western District of North Carolina (heretofore dismissed).
"▇▇▇▇▇ Property" means the "Properties" as defined in
the ▇▇▇▇▇ Mining Venture Agreement (including any changes
therein prior to the Closing resulting from the dispositions of
any interests therein, the modification of the terms of, or
termination of, any lease, or the acquisition for the ▇▇▇▇▇
Mining Venture of any new properties that have become
"Properties" thereunder, in accordance with the ▇▇▇▇▇ Mining
Venture Agreement).
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended.
"Law" means any federal, state, local, or foreign law,
statuate, ordinance, rule, order or regulation.
"Liabilities" mean any liabilities or obligations of any
nature, whether currently due, accrued, contingent or otherwise.
"Lien" means any lien, charge, covenant, condition,
easement, adverse claim, demand, encumbrance, limitation,
mortgage, security interest, option, pledge, or any other title
defect or restriction of any kind.
"Loss" has the meaning as set forth in Section 8.2(a).
"Material Adverse Effect" means a material adverse
effect on the business, financial condition or results of
operations of the Company taken as a whole.
"Person" means an individual, a partnership, a
corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental
entity (or any department, agency, or political subdivision
thereof).
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"Shareholder" means any Person who or which holds any
shares of Common Stock.
"Shares" has the meaning set forth in Section 3.2.
"Tax" or "Taxes" means any federal, state, local, or
foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code Section 59A), custom
duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property,
personal property, sales, use, transfer, minimum, estimated, or
other tax or governmental charge of any kind whatsoever,
including any interest, penalty, or addition thereto, whether
disputed or not.
"Tax Return" means any return, declaration, report,
claim or refund, or information return or statement relating to
Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
9.2 Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior approval of the other Parties; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by applicable law (in which case the disclosing Party will use its
reasonable best efforts to advise the other Party prior to making the
disclosure).
9.3 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties.
9.4 Entire Agreement. This Agreement and the agreements and documents
referred to in this Agreement or delivered hereunder are the exclusive statement
of the agreement among the Parties concerning the subject matter hereof. All
negotiations, disclosures, discussions and investigations relating to the
subject matter of this Agreement and the agreements and documents referred to in
this Agreement and delivered hereunder are merged into this Agreement, and there
are no representations, warranties, covenants, understandings, or agreements,
oral or otherwise, relating to the subject matter of this Agreement, other than
those included herein, and the agreements and documents referred to in this
Agreement and delivered hereunder.
9.5 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties, except Buyer may assign this Agreement and all of the
rights of the Buyer hereunder to an Affiliate of the Buyer.
9.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
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9.7 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way, the meaning or
interpretation of this Agreement.
9.8 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing delivered as follows:
If to the Seller or the Piedmont Mining Company, Inc.
Company (pre-closing) ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
With a copy to: Kennedy, Covington, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
Bank of America Corporate Center, Suite 4200
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, III, Esq.
If to the Buyer or the: Lancaster Mining Company, Inc.
Company (post-closing) ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ West, 57th Floor
Toronto, Ontario M5H 3YZ Canada
Attn: ▇▇▇▇ ▇▇▇▇▇, Executive Vice President
With a copy to: ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (29601)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
or to such other address as may have been designated in a prior notice. Notices
sent by registered or certified mail, postage prepaid, return receipt requested,
shall be deemed to have been given two (2) business days after being mailed, and
otherwise notices shall be deemed to have been given when received by the Person
to whom the notice is addressed.
9.9 Governing Law/Consent to Jurisdiction Arbitration. This Agreement
shall be governed by and construed in accordance with the laws of the State of
North Carolina exclusive of the conflict of law principles thereof. Any dispute
arising under this Agreement shall be subject to binding arbitration held before
a panel of three (3) neutral arbitrators in accordance with the Commercial Rules
of the American Arbitration Association in Charlotte, North Carolina, and
judgment upon the award of the arbitrators may be entered in any court of
competent jurisdiction.
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9.10 Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective boards of directors. No amendment of any
provision of this Agreement shall be valid unless the same shall be in writing
and signed by all of the parties. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
9.11 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.12 Expenses. Except to the extent otherwise specifically provided
herein, each of the Parties will bear it own costs and expenses (including legal
fees and expenses and transfer taxes) incurred in connection with this Agreement
and the transactions contemplated hereby.
9.13 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.
9.14 Pronouns. The use of a particular pronoun herein shall not be
restrictive as to gender or number but shall be interpreted in all cases as the
context may require.
9.15 Time Periods. Any action required hereunder to be taken within a
certain number of days shall be taken within that number of calendar days;
provided, however, that if the last day for taking such action falls on a
weekend or a holiday, the period during which such action may be taken shall be
automatically extended to the next business day.
9.16 Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
9.17 Gender and Plurals. Whenever a gender reference is incorrect, it
shall be deemed corrected. Whenever the singular is used instead of the plural
or the plural is used instead of the singular and is incorrect, it shall be
deemed corrected.
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IN WITNESS , the Parties hereto have executed this Agreement on the date
first above written.
LANCASTER MINING COMPANY, INC.,
the Buyer
By:_________________________________
Its:________________________________
KERSHAW GOLD COMPANY, INC.,
the Company
By:_________________________________
Its:________________________________
PIEDMONT MINING COMPANY, INC.,
the Seller
____________________________________
By:_________________________________
Its:________________________________
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GUARANTY OF KINROSS GOLD CORPORATION
The undersigned, KINROSS GOLD CORPORATION (the "Guarantor"), being the indirect
parent corporation of Lancaster Mining Corporation, and to induce Piedmont
Mining Company, Inc. to enter into the foregoing Agreement for Sale of Stock,
does hereby guarantee to Piedmont Mining Company, Inc., and its successors and
assigns, the due and punctual payment by Lancaster Mining Corporation, Inc., of
the Consideration under the foregoing Agreement for Sale of Stock. This is a
guaranty of payment and performance and not of collection, and the guaranteed
obligations may be enforced directly against the Guarantor without the necessity
of joining or first pursuing any claims against Lancaster Mining Corporation,
Inc.
IN WITNESS WHEREOF, the Guarantor has executed and joined in this
Agreement as such Guarantor effective as of the date thereof.
KINROSS GOLD CORPORATION
By: ____________________________
Its: ____________________________
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